Part 55 published on 01/09/16
Appeal allowed. Court of Appeal finds no oppression and defers to decision of board of directors
The lower court held that the condominium corporation acted oppressively in imposing a condition for approval of the owner’s requested changes to the common elements. The lower Court ordered the corporation to approve the requested changes, and also held that there should be no vote of the owners pursuant to sections 97 and 98 of the Condominium Act, 1998. [See Condo Cases Across Canada, Part 54, May 2016.] The condominium corporation appealed, and was successful. The Court of Appeal found that there was no oppression; and applied the “business judgement rule” to the board’s decision. The Court of Appeal said:
Therefore, to summarize, the first question for a court reviewing a condominium board’s decision is whether thedirectors acted honestly and in good faith and exercised the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. If they did, then the board’s balancing of the interests of a complainant under s. 135 of the Act against competing concerns should be accorded deference. The question in such circumstances is not whether a reviewing court would have reached the same decision as the board. Rather, it is whether the board reached a decision that was within a range of reasonable choices. If it did, then it cannot be said to have unfairly disregarded the interests of a complainant.
In this case, the Board’s decision had the effect of rendering the respondent’s proposal less profitable. But that does not mean that the Board unfairly disregarded the interests of the respondent. The Board was entitled, indeed required, to consider the impact of the changes on the interests of other unit owners. And as the deemed occupier of the common elements of the condominium, it was also entitled to consider the security implications for users of the common elements. It did not ignore or treat the interests of the respondent as being of no importance. It simply – in good faith and after a fair process – determined that legitimate and reasonable competing interests were more important. Its decision not to approve the requested changes to the common elements unless the respondent hired a security guard was within a range of reasonable of choices.